Loyalty programs encourage customers to patronize a business. Businesses offer discounts or rewards to customers who patronize them after they have collected enough points. Loyal customers become business builders. They buy more and bring in new customers. When designed and implemented correctly, effective loyalty programs encourage relatively new customers to behave like a company’s oldest and most profitable customers.
Here are our eight tips for running a successful and effective loyalty program:
- Do not treat a loyalty program as a one-off or short-term promotional discount. Use offers for that.
- Think of your customers. Ask yourself, is the reward relevant to them? Can you offer them a choice of reward options? Can they get better alternatives elsewhere?
- Continuously educate your customers about your loyalty program. This education helps to keep customers motivated to earn the rewards.
- Reward customers in proportion to the value they add to your business.
- Customers are not likely to stick around for a reward that takes years to redeem. It should not take too long and be too easy to earn the rewards.
- Measure the effect of your loyalty program on your business. Without this, it is near impossible to measure or quantify the impact of the loyalty program on your business.
- The activities you reward customers for should be linked to the desired customer behaviours that help your business grow. Is the desired behaviour to encourage increased spending? Is the desired behaviour to buy a particular item?
- The reward you give to customers should encourage customers to remain loyal to your business.
The most successful and effective loyalty programs encourage the desired customer behaviours that help the business grow. However, it may be challenging to have a successful and effective loyalty program without the right solution. A platform like Offerwhere can help with this.